Tag Archives: Hainan

The second homes phenomenon not only increases the economic dependency to tourism and real estate sector in Hainan, but also aggravates social inequalities on the island.

In 2013, 40% of all residential real estate transactions were made by non locals. This figure reached 85% in Sanya, the island’s main resort city1. This means that few locals can now afford to buy their home in the southern coast of Hainan. Only wealthy mainlanders can do so.

The Hainanese society has a complex structure, and has long suffered from disparities; second homes may strengthen these inequalities.

Feng Chongyi and David Goodman2 note in the 90’s that the Hainanese society was divided between locals and mainlanders. With Hainan being granted the status of province in 1988, hundred thousand skilled workers flocked from mainland to the island where they were offered high positions in the local administrations and state owned companies.

The development of tourism and second homes in Hainan may deepen these divisions.

According to a study made by Wang, Wei and Li3, Sanya’s population is divided into three main groups that are the local residents (500,000 inhabitants), visitors (100,000) and non local residents (200 000 inhabitants living in the city several weeks/months per year).

This new population does not only affect real estate prices, but also everyday product prices, this makes locals complain about inflation. The municipal government of Sanya has constantly readjusted the amount of allocation offered to its local residents.Social discontent in Hainan can lead to further tensions between locals and second home owners, and this may make the island’s image less attractive.

Another possible consequence of the second home boom in Hainan is the destruction of local cultural particularisms. With more mainlanders coming to Hainan, the island can lose its “art de vivre”. In the 90’s, one of the consequence of the massive coming of mainlanders to the Hainan was the weakening of Hainanese dialect.

Today, Hainan has for ambition to become a successful tourist destination, but can also do so by offering more than “the sea and sun package”, and so needs to promote its insular culture. And so an equilibirum needs to be found between the settling of second home owners from mainland and the preservation of local culture(s).

As noted in a previous post, the second home phenomenon in China is quite different from the one in Western countries. Most of them are not exactly holiday homes, but are bought for other purposes. On exception may be Hainan: the southern island is presented as a major tourist destination and so the island has attracted thousands of Mainlanders who wish to spend a few weeks per year under the sun. But second home acquisitions in Hainan are also motivated by speculation. Per consequence, this phenomenon needs be carefully scrutinized by local authorities, and more actions should be taken to reduce the local dependency to the real estate sector.

In the past, in the early years of reforms, Hainan was doomed by real estate speculation and this partly caused the economic turmoil the island experienced in the late 90’s.

Since then, the island has been recovering thanks to the development of tourism. With tourism and the rising of Chinese middle-class, second homes have appeared in Hainan. According to Wang Xiaoxiaà in in 2006, 25,000 second homes could be found Haikou1.

In 2010 was launched an ambitious plan to transform Hainan into an international destination by 2020. This decision boosted the housing sector on the island, but for fear of overheating, the local government limited the number of acquisitions one may purchased in Hainan. In spite of these measures, the island experienced a strong increase of real estate prices, and Sanya, Hainan’s main resort city, has become the 5th most expensive Chinese city.

For the local authorities, real estate and construction have gradually become their main financial resources. For the first semester 2014, more than one third of the provincial GDP was produced by real estate, this figure reached nearly three-fourths in Sanya2.

This causes the whole economy of Hainan to be very dependent on real estate. And the bad news is that real estate in Hainan is very volatile and speculative. Most real estate programmes do not answer local housing demands but target wealthy Mainlanders, and since the beginning of this year, sales have started to drop.

This should drive the local government of Hainan to reconsider its strategy and diversify the island’s economic activities.

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I have studied this aspect of the development of tourism in Hainan in my Ph.D. dissertation entitled “Les politiques de développement regional d’une zone périphérique chinoise, le cas de la province de Hainan (Regional development policies in a Chinese peripheral region: the case of Hainan province). This dissertation was defended on December, 18, 2014, and will soon be available online.

The once isolated island of Hainan has become a successful tourist destination, attracting millions of Chinese visitors every year.

The island is well connected to the mainland thanks to two airports, one in Haikou, the provincial capital, and the other in Sanya, the main tourist spot of the province. A third one will be inaugurated in 2015.
A train ferry also links Hainan to Guangdong across the Qiongzhou strait, making it possible for visitors from Beijing to get to the sunny province by train.

Within the province, most of the attractions of the Eastern coast can be reached by a high speed train. Another line will be in operation by the end of 2015. It has never been easy to travel to Hainan, but in spite of these new and efficient transport facilities, many visitors prefer to go to Hainan by car (using ferries).

As a result, during the last Chinese New Year Holiday, the city of Sanya was overwhelmed by traffic jams. Visitors who came to enjoy beaches, sun and unpolluted air, had to endure heavy congestion instead .

Some measures have been taken by the municipal authorities of Sanya to ease traffic in the city. One is to take better control of the car-rental market. Car rental is a fairly new phenomenon in China. In Hainan, professional car rentals companies, hotels, and even car dealers are involved in this business. Another is to develop more road infrastructures to prevent congestion, and a third one is to give incentives to visitors to use public transport.

Nevertheless, this issue is likely to continue in the future as Hainan is expected to host more visitors annually. To reduce traffic congestion, tourism activities in Hainan need to be less concentrated in Sanya. More attractions need to be promoted on the entire island.

Another point regards China’s public holiday system. The whole tourist industry, and not only in Hainan, would benefit greatly if the Chinese got more holidays, with more flexible dates.